Microchip (NASDAQ:MCHP) reported that its Data Center Solutions business generated $302.7 million in calendar 2025 revenue and is expected to grow about 65% to roughly $500 million in 2026. The broader data center and compute end market represents about 18% of total revenue.
March 2026 quarter Data Center Solutions revenue rose 62.9% year over year. Due to broad-based input cost pressures, Microchip plans selective price increases across its portfolio, which it expects will not affect guidance or results for the fiscal quarter ending June 30, 2026.
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AI-generated analysis. Not financial advice.
Positive
Data Center Solutions revenue of $302.7 million in calendar year 2025
Expected ~65% Data Center Solutions revenue growth in calendar 2026 to about $500 million
Data center and compute end market is ~18% of total company revenue
March 2026 Data Center Solutions revenue up 62.9% year over year
Selective price increases expected to have no impact on June 30, 2026 quarter guidance
Negative
Broad-based input cost pressures from suppliers and internal operations
Key Figures
Data Center Solutions revenue 2025:$302.7 millionExpected 2026 unit revenue:approximately $500 millionExpected 2026 growth:approximately 65%+5 more
8 metrics
Data Center Solutions revenue 2025$302.7 millionCalendar year 2025 revenue for Data Center Solutions Business Unit
Expected 2026 unit revenueapproximately $500 millionManagement expectation for calendar year 2026 Data Center Solutions revenue
Expected 2026 growthapproximately 65%Expected growth for Data Center Solutions Business Unit in 2026 vs 2025
Datacenter & Compute mixapproximately 18%Share of total company revenue from datacenter and compute end market
March 2026 YoY growth62.9%Year-over-year revenue increase for Data Center Solutions Business Unit in March 2026 quarter
Quarterly dividend$0.455 per shareDividend announced May 7, 2026, payable June 5, 2026
Conference dateJune 2, 2026Bank of America Global Technology Conference presentation date
Conference dateJune 3, 2026Evercore Global TMT Conference presentation date
Market Reality Check
Price:$94.65Vol:Volume 10,681,480 vs 20-d...
normal vol
$94.65Last Close
VolumeVolume 10,681,480 vs 20-day average 11,427,406 (relative volume 0.93), showing typical activity into this update.normal
TechnicalShares at $94.65, trading above 200-day MA of $70.59 and 10.63% below the 52-week high of $105.91.
Peers on Argus
MCHP fell 1.45% while peers like ALAB and CRDO also declined, with momentum data...
2 Down
MCHP fell 1.45% while peers like ALAB and CRDO also declined, with momentum data showing 2 peers moving down (median move about -9.6%), indicating broader semiconductor/datacenter weakness.
Common CatalystSector pressure appears broader; one peer (CRDO) had earnings news, but the day’s moves largely reflect wider semiconductor/datacenter sentiment rather than company-specific factors alone.
Quarterly cash dividend of $0.455 per share with June 5, 2026 payment date.
Pattern Detected
Recent product and conference announcements have produced modest, mixed price reactions, with no consistent pattern of strong follow-through up or down.
Recent Company History
Over the past month, Microchip has focused on investor outreach and product expansion. It announced a $0.455 quarterly dividend on May 7, 2026, launched a new EX‑423 oscillator on May 14, and unveiled HV‑D3 SiC power modules for AI data centers on May 26. Multiple conference appearances were also highlighted. Price reactions to these items ranged from about -2.45% to +4.94%, suggesting news-driven moves have been moderate and varied rather than one-directional.
Market Pulse Summary
This announcement highlighted Microchip’s growing exposure to datacenters, with the Data Center Solu...
Analysis
This announcement highlighted Microchip’s growing exposure to datacenters, with the Data Center Solutions Business Unit delivering $302.7 million of revenue in 2025 and management expecting about 65% growth to roughly $500 million in 2026. The broader datacenter and compute segment now represents about 18% of total revenue. The company also flagged broad-based input cost pressures and planned selective price increases. Investors may track whether March 2026 quarter growth of 62.9% in this unit persists and how pricing actions interact with future guidance.
Key Terms
pcie, cxl, retimer, chips act
4 terms
pcietechnical
"storage controller/expanders/accelerators, PCIe and CXL memory controllers, and our Switchtec PCIe switch"
PCIe (PCI Express) is a high-speed connection standard used inside computers and servers to link components like graphics cards, storage drives, and network adapters so they can send data quickly to each other. Investors care because faster, more efficient PCIe support can make a product more competitive—think of it as wider, faster highway lanes for data—which affects device performance, upgrade flexibility, manufacturing cost and customer demand.
cxltechnical
"PCIe and CXL memory controllers, and our Switchtec PCIe switch and retimer businesses."
An abbreviation for “cancel” or “canceled,” used in brief notices to indicate that an event, order, meeting, dividend, or other planned action will no longer take place. Investors care because cancellations can change expected cash flows, timing of corporate actions, trading volume or regulatory filings—similar to someone calling off a planned event, which can alter plans and prompt reassessment of value or risk.
retimertechnical
"Switchtec PCIe switch and retimer businesses. These product families span multiple generations"
A retimer is a small electronic component that cleans up, re-times and boosts very fast digital signals traveling between chips or over cables so data arrives accurately over longer distances. Think of it as a relay that listens to a garbled message, restores its timing and clarity, and passes it on; for investors, retimers matter because they enable higher-performance products, support newer industry standards, and can drive demand, pricing power and supply-chain value for companies that design or sell them.
chips actregulatory
"the impact that the CHIPS Act will have on increasing manufacturing capacity in our industry"
A Chips Act is government legislation or a public funding program aimed at boosting domestic semiconductor manufacturing, research and supply-chain resilience by offering grants, tax incentives, or rules to support chipmakers and equipment suppliers. For investors it matters because such programs can shift where chips are built, lower costs or risks for manufacturers, and create opportunities for firms that make chips, tools, or materials—much like a large, targeted construction subsidy that reshapes an industry’s landscape.
AI-generated analysis. Not financial advice.
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Our Data Center Solutions Business Unit generated $302.7 million in revenue in calendar year 2025, with approximately 65% growth expected in calendar year 2026 to approximately $500 million
Our broader total Datacenter and Compute end market which also includes power management, catalog MCUs, analog and security products represented approximately 18% of total revenue
CHANDLER, Ariz., June 01, 2026 (GLOBE NEWSWIRE) -- (NASDAQ: MCHP) - Microchip Technology Incorporated, a leading provider of smart, connected, and secure embedded control solutions, today provided additional information regarding its Data Center Solutions Business Unit.
Microchip’s President and CEO, Steve Sanghi, said “We have received several requests from investors for additional revenue details related to our Data Center business. Our broad Data Center and Compute end market includes our catalog MCUs, analog, power management, timing, memory, and security products, as well as our client PC revenue. These catalog products are general purpose products that go into many end markets, the data center market being just one of them. Our data center and compute end market represents about 18% of our total revenue. Within that broad end market is our Data Center Solutions Business Unit, which makes products exclusively for datacenters. This business unit has three dedicated product families comprising: storage controller/expanders/accelerators, PCIe and CXL memory controllers, and our Switchtec PCIe switch and retimer businesses. These product families span multiple generations through our recently introduced industry-first 3nm Gen6 PCIe Switch, and our new G6 retimer product line with backward generation compatibility. Our Data Center Solutions business unit generated $302.7 million in revenue in calendar year 2025, and we expect it to grow by about 65% in calendar year 2026 to about $500 million as we are experiencing continued acceleration of revenue in this business unit. In the March 2026 quarter, our Data Center Solutions business unit revenue was up 62.9% from the prior year quarter.”
Mr. Sanghi continued, “As we have discussed in recent investor forums, we have been monitoring input cost pressures from our suppliers and our internal operations carefully. Having concluded that these cost increases are broad-based and cannot be fully absorbed by us, we have made the decision to implement price increases selectively across our broad product portfolio. We are working on the specifics and will be communicating that to our customers. The price increase will have no impact on our guidance or results for the fiscal quarter ending June 30, 2026.”
Microchip will be presenting at the Bank of America Global Technology Conference on June 2, 2026 and also at the 2026 Evercore Global TMT Conference on June 3, 2026.
Cautionary Statement: The statements in this release relating to expecting our data center solutions business unit revenue to have approximately 65% growth in calendar year 2026 to approximately $500 million, that we are experiencing continued acceleration of revenue in this business unit, that these cost increases are broad-based and cannot be fully absorbed by us, and that our price increase will have no impact on our guidance or results for the fiscal quarter ending June 30, 2026 are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause our actual results to differ materially, including, but not limited to: any continued uncertainty, fluctuations or weakness in the U.S. and world economies (including China and Europe) due to changes in interest rates or high inflation, actions taken or which may be taken by the Trump administration or the U.S. Congress, monetary policy, political, geopolitical, trade or other issues in the U.S. or internationally (including the military conflicts in the Middle East and Ukraine-Russia), the scope and level of tariffs; further changes in demand or market acceptance of our products and the products of our customers and our ability to respond to any increases or decreases in market demand or customer requests to increase orders or reschedule or cancel orders; the mix of inventory we hold, our ability to satisfy any short-term orders from our inventory and our ability to effectively manage our inventory levels; changes or fluctuations in customer order patterns and seasonality; changes in utilization of our manufacturing capacity and our ability to effectively manage our production levels to meet any increases or decreases in market demand or any customer requests to reschedule or cancel orders; the impact of inflation on our business; competitive developments including pricing pressures; the level of orders that are received and can be shipped in a quarter; our ability to realize the expected benefits of our long-term supply assurance program; our ability to effectively manage our supply of wafers from third party wafer foundries to meet any increases or decreases in our needs and the cost of such wafers, our ability to obtain additional capacity from our suppliers to increase production to meet any future increases in market demand; our ability to successfully integrate the operations and employees, retain key employees and customers and otherwise realize the expected synergies and benefits of our acquisitions; the impact of any future significant acquisitions or strategic transactions we may make; the costs and outcome of any current or future litigation or other matters involving our acquisitions (including the acquired business, intellectual property, customers, or other issues); foreign currency effects on our business; the costs and outcome of any current or future tax audit or investigation regarding our business or our acquired businesses; the impact that the CHIPS Act will have on increasing manufacturing capacity in our industry by providing incentives for us, our competitors and foundries to build new wafer manufacturing facilities or expand existing facilities; the amount and timing of any incentives we may receive under the CHIPS Act, the impact of current and future changes in U.S. corporate tax laws (including the One Big Beautiful Bill Act, the Inflation Reduction Act of 2022 and the Tax Cuts and Jobs Act of 2017);disruptions in our business or the businesses of our customers or suppliers due to natural disasters (including any floods in Thailand), terrorist activity, armed conflict, war, worldwide oil prices and supply, public health concerns or disruptions in the transportation system; and general economic, industry or political conditions in the United States or internationally.
For a detailed discussion of these and other risk factors, please refer to Microchip's filings on Forms 10-K and 10-Q. You can obtain copies of Forms 10-K and 10-Q and other relevant documents for free at Microchip's website (www.microchip.com) or the SEC's website (www.sec.gov) or from commercial document retrieval services.
Stockholders of Microchip are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date such statements are made. Microchip does not undertake any obligation to publicly update any forward-looking statements to reflect events, circumstances or new information after this June 1, 2026 press release, or to reflect the occurrence of unanticipated events.
About Microchip:
Microchip Technology Inc. is a broadline supplier of semiconductors committed to making innovative design easier through total system solutions that address critical challenges at the intersection of emerging technologies and durable end markets. Its easy-to-use development tools and comprehensive product portfolio support customers throughout the design process, from concept to completion. Headquartered in Chandler, Arizona, Microchip offers outstanding technical support and delivers solutions across the industrial, automotive, consumer, aerospace and defense, communications and computing markets. For more information, visit the Microchip website at www.microchip.com.
Note: The Microchip name and logo are registered trademarks of Microchip Technology Incorporated in the U.S.A. and other countries. All other trademarks mentioned herein are the property of their respective companies.
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FAQ
How much revenue did Microchip (NASDAQ:MCHP) Data Center Solutions generate in 2025?
Microchip Data Center Solutions business generated $302.7 million in revenue in calendar year 2025. According to Microchip, this segment includes storage controllers, PCIe and CXL memory controllers, and Switchtec PCIe switches and retimers dedicated exclusively to data center customers.
What 2026 revenue growth does Microchip (MCHP) expect for its Data Center Solutions unit?
Microchip expects its Data Center Solutions business to grow about 65% in calendar year 2026 to roughly $500 million. According to Microchip, this outlook reflects continued acceleration of revenue across its dedicated data center storage, PCIe/CXL, and Switchtec product lines.
What share of Microchip (MCHP) total revenue comes from data center and compute markets?
Microchip reports that its broader data center and compute end market represents about 18% of total revenue. According to Microchip, this category includes catalog MCUs, analog, power management, timing, memory, security products, and client PC revenue serving data center and other applications.
How did Microchip (MCHP) Data Center Solutions revenue perform in the March 2026 quarter?
Microchip Data Center Solutions revenue in the March 2026 quarter increased 62.9% versus the prior-year quarter. According to Microchip, this strong year-over-year gain reflects accelerating demand for its data center-specific products across multiple generations, including its recently introduced 3nm Gen6 PCIe switches.
Is Microchip (MCHP) raising prices due to cost pressures and how will it affect guidance?
Microchip plans selective price increases across its product portfolio in response to broad-based input cost pressures. According to Microchip, these increases are not expected to affect guidance or financial results for the fiscal quarter ending June 30, 2026, despite higher supplier and internal costs.
What product families are included in Microchip (MCHP) Data Center Solutions business?
Microchip Data Center Solutions unit includes storage controllers/expanders/accelerators, PCIe and CXL memory controllers, and Switchtec PCIe switches and retimers. According to Microchip, these offerings span multiple generations, including its latest industry-first 3nm Gen6 PCIe switch and new G6 retimer product line.
Why is Microchip (MCHP) implementing selective price increases in 2026?
Microchip is raising prices selectively because input cost increases are broad-based and cannot be fully absorbed. According to Microchip, it is working through implementation details with customers and expects no impact on guidance or results for the fiscal quarter ending June 30, 2026.
